Treasury Secretary Yellen urges Congress to act on the debt limit

WASHINGTON, D.C. (NBC) – Treasury Secretary Janet Yellen and Federal Reserve Board Chairman Jerome Powell testified before the Senate Banking, Housing and Urban Affairs Committee Tuesday.

Yellen said she believes the impact of Congress not acting on the debt limit set to expire on December 15^th would eviscerate our current recovery.

She said, “I cannot overstate how critical it is that Congress address this issue. America must pay its bills on time in full. If we do not, we will eviscerate our current recovery. In a matter of days, the majority of Americans would suffer financial pain, as critical payments like Social Security checks and military paychecks would not reach their bank accounts, and that would likely be followed by a deep recession.”

Both Yellen and Powell suggested that while there is not enough yet known about the Omicron variant of the coronavirus, concerns over the variant could reduce people’s willingness to work in person, which they say would slow progress in the labor market.

Powell said, “The recent rise in COVID-19 cases and the emergence of the Omicron variant poses downside risks to the employment and economic activity, and increased uncertainty for inflation. Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply chain disruptions.”